Conquer Your Financial Fears in 5 Steps

It’s nearly Halloween, so let’s talk about something really scary: Many of us have the habit of leaving our finances to chance. We hide from financial issues that scare us, but all that does is leave us open to frightening surprises.

As with spooky monsters under our beds, finances do less harm when you shine a light on them. So, follow the advice of financial gurus and face these common financial fears directly.

1. Educate yourself about risks

Yes, there is risk of losing money on stock market investments. But if you avoid risk altogether, you also give up the potential returns of the market, which are pretty hard to replicate anywhere else.

Solution: Educate yourself. It is possible to get started with a small amount of money in order to learn your way around the various kinds of investments. Money Talks News founder Stacy Johnson offers a primer on how to invest. It explains how to address risks by diversifying, using mutual funds and investing for the long term. As Stacy writes:

“I’ve been buying both individual stocks and mutual funds for decades. I don’t remember the trepidation I must have felt at first. But one thing’s for sure: The more I’ve learned, the fewer mistakes I’ve made and the less fear I’ve felt.”

2. Ditch your bad debt

Being wary of debt is smart. But being so afraid you freeze isn’t. And it’s important to understand the difference between good debt and bad debt.

Good debt is used on a purchase that appreciates in value — such as a mortgage for a home, or even a loan for a college education. Bad debt is incurred when you splurge on luxuries such as clothes, vacations, edibles or even cars. Debt piles up when you are living beyond your means.

Solution: If you’ve been in denial about your mounting debt, it’s time to tackle it. The way to get started, as outlined in this step-by-step approach, is to get all your debts down on a spreadsheet, so you can begin to put a plan in place.

If you need help, stop by our Solutions Center and seek out a professional who specializes in helping debt-laden individuals consolidate debt and create a workable payment plan.

3. Create a sound budget

Not tracking your expenses is like driving with your eyes closed. Clearly, what you don’t know about your finances can hurt you.

Solution: Set a budget for a day, then a week, and then gradually increase the range. Among our top tips for sticking to a budget is to start with a goal you’re working toward. Doing so will make it easier for you to cut spending.

Track your expenses with software, such as that offered by our partner, You Need a Budget.

4. Don’t ignore estate planning

Put your affairs in good order, and you won’t have to fear that your children or other heirs will struggle to figure it out — and curse you — after you’re gone.

Solution: There are eight documents that you should put in place, starting with a last will and testament. That is the main way to ensure you control what your spouse, children and other dependents receive in the event of your death. You can also specify funeral arrangements.

You can create your own will, and our partner Rocket Lawyer can help with the process. For more on Rocket Lawyer and creating your own will, check out “Do I Really Need a Will?.”

Or if it makes you more comfortable, enlist an attorney’s help.

5. Prepare now for tax time

Everyone has heard the horror stories of people miscalculating their taxes — or ignoring them — and ending up with a budget-busting bill.

Solution: Lay the groundwork now, so you don’t have to scramble during the last-minute spring rush. If your taxes are relatively simple, now would be a good time to familiarize yourself with online tax software so you can file without paying a tax preparer.

If you want someone else to tackle your taxes, get that help in place now. Ask family and friends for suggestions on qualified CPAs. Then interview two or three. That way you’ll be prepared after you ring in the new year.

For more, read “ How to Get the Right Tax Pro at the Right Price.”

How to find cheaper car insurance in minutes

Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
10 Things That Really Are Free on Amazon
10 Things That Really Are Free on Amazon

These freebies are available to anyone — no Prime membership necessary.

8 Amazon Picks Under $30 for Coffee Lovers
8 Amazon Picks Under $30 for Coffee Lovers

We’ve brewed up a list of amazing Amazon products that are sure to perk you up.

7 Steps to Keep Your Car Looking Like New
7 Steps to Keep Your Car Looking Like New

Take a few steps to preserve the beauty of your car, and you stand to get a lot more money at trade-in time.

9 Affordable Ways to Make Your Home Look Expensive
9 Affordable Ways to Make Your Home Look Expensive

These products from Amazon add elegance to your home without the expense.

This Is the Best Time of Day to Take Blood Pressure Meds
This Is the Best Time of Day to Take Blood Pressure Meds

The right timing can help you prevent a big — and possibly fatal — mistake.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
This Gas Station Scam Is Victimizing More Drivers
This Gas Station Scam Is Victimizing More Drivers

For the second straight year, a growing number of Americans believe they’ve fallen prey to this scam.

This Is the Most Popular Age for Claiming Social Security
This Is the Most Popular Age for Claiming Social Security

Both men and women are most likely to start receiving Social Security benefits at this age.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?
Could You Give Up These 7 Expenses to Save Thousands of Dollars a Year?

You could save more than $30,000 by setting aside these costly expenses for just one year.

6 Things You Should Never Buy at Trader Joe’s
6 Things You Should Never Buy at Trader Joe’s

We love Trader Joe’s for plenty of reasons. But think twice about this handful of products.

Don’t Toss These 7 Household Items — Sell Them
Don’t Toss These 7 Household Items — Sell Them

Here’s how to earn cash as you give new life to these unwanted items.

6 Legal Documents Retirees Need — but Don’t Have
6 Legal Documents Retirees Need — but Don’t Have

Few retirees have these documents that are crucial to their golden years — especially during a pandemic.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

7 Unusual Ways to Declutter Your Home
7 Unusual Ways to Declutter Your Home

Tired of possessions weighing you down? Here are seven ways to declutter painlessly and effectively.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

11 Expenses That Quietly Drain Your Wallet
11 Expenses That Quietly Drain Your Wallet

It’s scandalously easy to overspend in these areas of your life.

5 Ways Joe Biden Wants Social Security to Change
5 Ways Joe Biden Wants Social Security to Change

Here’s where Biden — as well as Trump — stands on the future of the Social Security retirement system.

9 Dumb Ways You Are Ruining Your Home Value
9 Dumb Ways You Are Ruining Your Home Value

Homeowners, beware these mistakes that can drive away potential buyers.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

10 Deep Discounts Available on Amazon This Friday
10 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

7 Tips for Building an Emergency Stockpile
7 Tips for Building an Emergency Stockpile

A pandemic or natural disaster could leave you reliant on your existing food supply. Is your pantry prepared?

21 Things You Should Always Buy at a Dollar Store
21 Things You Should Always Buy at a Dollar Store

Dollar stores have great bargains on both everyday and occasional purchases.

15 Outrageously Overpriced Products — and How to Save on Them
15 Outrageously Overpriced Products — and How to Save on Them

Retailers mark up products by hundreds of times their cost — but you don’t have to pay the premium.

18 Amazon Purchases That We Are Loving Right Now
18 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.